In the 2024 fiscal year, the “Chinese Jewelry King” Chow Tai Fook’s sales gross profit margin hit a record low since the disclosure of financial data. Over the past month, the market value of Chow Tai Fook has evaporated by about 20 billion Hong Kong dollars.
Reported by “Southern Metropolis Daily” on the 8th, on June 5th, the news about “Chow Tai Fook’s Shenzhen factory shutting down production” went viral. Subsequently, Chow Tai Fook’s financial performance for the 2024 fiscal year was announced, falling below expectations, and its stock price followed suit in decline.
In the 2024 fiscal year, Chow Tai Fook’s sales gross profit margin was 20.5%, a decrease of nearly 2% compared to the previous year, and a significant drop of over 8% compared to the 2021 fiscal year, marking the lowest since financial data disclosure in the 2009 fiscal year.
Over the past month, Chow Tai Fook’s market value has evaporated by approximately 20 billion Hong Kong dollars. Since January 2023, Chow Tai Fook’s stock price has plummeted by nearly 50%, with a market value evaporating by about 80 billion Hong Kong dollars.
“Chinese Jewelry King” Chow Tai Fook went public in 2011, targeting franchise and sinking markets, initiating a rapid store expansion model. Prior to that, Chow Tai Fook had planned to add 600 to 800 new stores in the 2024 fiscal year but later adjusted it to 300 to 400 stores. However, the announced financial results show that the net addition of jewelry retail points was only 143.
Although Chow Tai Fook’s profit for the 2024 fiscal year increased by 20.7% compared to the low point of the 2023 fiscal year, it only rebounded to 96.8% compared to the (pandemic period) 2022 fiscal year. Mainstream institutions estimate that the profit for Chow Tai Fook this year should be around 7.71 billion Hong Kong dollars.
What worries investors even more is that from April 1 to May 31, 2024, unaudited operating data revealed a significant 20.2% year-on-year decrease in Chow Tai Fook’s overall retail value. The mainland market, which contributes nearly 90% to the group, saw a nearly 20% drop in retail value, while Hong Kong, Macau, and other markets witnessed a nearly 30% decline in retail value.
As the beginning of the 2025 fiscal year, Chow Tai Fook’s performance in mainland China and the Hong Kong-Macau markets in April and May is not satisfactory. Specifically, in terms of same-store sales performance classified by product, compared to the 2023 fiscal year, the sales of jewelry inlaid, platinum, and K gold jewelry decreased by 32.9% and 31.1%, respectively, while the sales of gold jewelry and products decreased by 31.1% and 34.6%, respectively. The same-store sales volume in the two major markets shrunk by nearly 40%.